WASHINGTON (AP) _ Inventories at American businesses rose a moderate 0.4 percent in February even as sales increased a rapid 0.9 percent.
Too big a buildup in inventories in relation to sales can signal production cutbacks as businesses work to reduce the backlog of unsold goods.
But the current inventory level is lean. Businesses had enough goods on shelves and back lots during both February and January to meet demand for 1.37 months, the Commerce Department said today.
That means, according to analysts, that businesses probably will increase inventories along with sales and that’s a good sign for manufacturers, who have been hit hard by recessions in Asia, Latin America and Russia.
The February inventory increase, to a seasonally adjusted $1.09 trillion, came after no change in January.
The advance in business sales, to $799.3 billion, followed a 0.2 percent decline the month before.
In February, manufacturers’ inventories were unchanged; wholesalers’ stocks were up 0.6 percent, and retailers’ rose up 0.7 percent. Sales jumped 1.7 percent at retailers, the strongest in five years; 1 percent at wholesalers and 0.3 percent at factories.